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5 Broker-Friendly Investment Options as We Welcome 2022
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With COVID-19 cases rising exponentially in most countries across the globe, including the United States, the economic recovery, witnessed last year, is feared to take a beating this time. Apart from the spike in infection, supply-chain woes pose another challenge to the U.S. economy.
Volatility and uncertainty is likely to be prevalent at least in the near term. Given this scenario, it seems prudent for investors to add stocks to their portfolios that are upgraded by brokers and are also witnessing upward earnings estimate revisions. Stocks like Academy Sports and Outdoors (ASO - Free Report) , Berry Global (BERY - Free Report) , Boise Cascade (BCC - Free Report) , Bunge Limited (BG - Free Report) and Caleres (CAL - Free Report) fit the bill and should grace the portfolios of investors.
Why is Broker Advice Necessary?
With a plethora of stocks flooding the market from various industries at any point of time, it is almost impossible for individual investors to come up with a winning portfolio of stocks without proper guidance. Therefore, it is in the best interest of investors to seek advice from “experts in the field."
Brokers go through minute details of the publicly available financial documents apart from attending company conference calls and other presentations. Since brokers follow the stocks in their coverage in great detail, they revise their earnings estimates after carefully examining the pros and cons of an event for the concerned company. Estimate revisions serve as an important pointer regarding the price of a stock.
To take care of the earnings performance, we designed a screen based on improving analyst recommendations and upward estimate revisions over the last four weeks.
Do Not Ignore the Top Line
However, designing a strategy based solely on the bottom line is unlikely to result in a winning approach. According to many market watchers, a revenue beat is more creditable for a company than a mere earnings outperformance, especially in an environment of revenue weakness due to macroeconomic headwinds. To address top-line concerns, we included the price/sales ratio in our screen, which serves as a strong complementary valuation metric.
Screening Criteria
# (Up-Down Rating)/ Total (4 weeks) =Top #75:This gives the list of top 75 companies that have witnessed net upgrades over the last 4 weeks.
% change in Q (1) est. (4 weeks) = Top #10:This gives the top 10 stocks that have witnessed earnings estimate revisions over the past 4 weeks for the upcoming quarter.
Price-to-Sales = Bot%10:The lower the ratio, the better. Companies meeting this criterion are in the bottom 10% of our universe of over 7,700 stocks.
Price greater than 5:A stock trading below $5 will not likely be of significant interest to most investors.
Average Daily Volume greater than 100,000 shares over the last 20 trading days:Volume has to be significant to ensure that these are easily traded.
Market value ($ mil) = Top #3000:This gives us stocks that are the top 3000 in terms of market capitalization.
Here are 5 of the 10 stocks that passed the screen:
Boise, ID-based Boise Cascade Company, which makes wood products and distributes building materials in the United States as well as Canada, currently sports a Zacks Rank #1 (Strong Buy). BCC is aided by factors like favorable commodity wood products, pricing and a robust construction activity. BCC recently announced that it will build a 10,000-square feet warehouse in Ohio, which will expand its distribution network in the United States.
Boise Cascade’s bottom line outshined the Zacks Consensus Estimate in each of the last four quarters, the average being 45.5%. The stock, currently carrying a Zacks Rank #2 (Buy), has witnessed the Zacks Consensus Estimate for 2022 earnings being revised roughly 1% upward over the past 60 days. Shares of BCC have gained 33.7% in a year’s time.
Caleres:This Saint Louis-based company, currently flaunting a Zacks Rank of 1, engages in the retail and wholesale of footwear. Strong performance of its Famous Footwear and Brand Portfolio segments is driving the top line.
Caleres has an excellent track record considering its earnings per share. The bottom line outshined the Zacks Consensus Estimate in each of the last four quarters, the average being in excess of 100%. Shares of CAL have soared above 45% over the past year.
Headquartered in St. Louis, MO,Bunge operates as an agribusiness firm, delivering essential food, feed and fuel across the globe. BG is reportedly the world’s leader in oilseed processing, and a leading producer and supplier of specialty plant-based oils and fats.
The stock, currently sporting a Zacks Rank #1, has witnessed the Zacks Consensus Estimate for next-year earnings being revised 0.5% upward over the past 60 days. Shares of BG have gained 35.3% over the past year.
Academy Sports and Outdoors: Based in Katy, TX, Academy Sports is a leading full-line sporting goods and outdoor recreation retailer in the United States. ASO continues to benefit from its strategic initiatives to improve its merchandise planning and allocation, operations, customer service and supply chain.
The stock, currently sporting a Zacks Rank of 1, witnessed the Zacks Consensus Estimate for next-year earnings being revised 10.8% upward over the past 60 days. Shares of CAL have surged more than 100% over the past year.
Berry Global Group manufactures and distributes non-woven specialty materials, engineered materials and consumer packaging products in the market. BERY is poised to gain from strength in its food & beverage and healthcare end markets, along with recovery in the construction space in the quarters ahead.
Berry Global’s bottom line outshined the Zacks Consensus Estimate in each of the last four quarters, the average being 16.5%. Shares of BERY have gained 33.1% over the past year. BERY currently flaunts a Zacks Rank #1.
You can get the rest of the stocks on this list by signing up now for your 2-week free trial to the Research Wizard and start using this screen in your own trading. Further, you can also create your own strategies and test them first before taking the investment plunge.
The Research Wizard is a great place to begin. It's easy to use. Everything is in plain language. And it's very intuitive. Start your Research Wizard trial today. And the next time you read an economic report, open up the Research Wizard, plug your finds in, and see what gems come out.
Disclosure: Officers, directors and/or employees of Zacks Investment Research may own or have sold short securities and/or hold long and/or short positions in options that are mentioned in this material. An affiliated investment advisory firm may own or have sold short securities and/or hold long and/or short positions in options that are mentioned in this material.
Image: Bigstock
5 Broker-Friendly Investment Options as We Welcome 2022
With COVID-19 cases rising exponentially in most countries across the globe, including the United States, the economic recovery, witnessed last year, is feared to take a beating this time. Apart from the spike in infection, supply-chain woes pose another challenge to the U.S. economy.
Volatility and uncertainty is likely to be prevalent at least in the near term. Given this scenario, it seems prudent for investors to add stocks to their portfolios that are upgraded by brokers and are also witnessing upward earnings estimate revisions. Stocks like Academy Sports and Outdoors (ASO - Free Report) , Berry Global (BERY - Free Report) , Boise Cascade (BCC - Free Report) , Bunge Limited (BG - Free Report) and Caleres (CAL - Free Report) fit the bill and should grace the portfolios of investors.
Why is Broker Advice Necessary?
With a plethora of stocks flooding the market from various industries at any point of time, it is almost impossible for individual investors to come up with a winning portfolio of stocks without proper guidance. Therefore, it is in the best interest of investors to seek advice from “experts in the field."
Brokers go through minute details of the publicly available financial documents apart from attending company conference calls and other presentations. Since brokers follow the stocks in their coverage in great detail, they revise their earnings estimates after carefully examining the pros and cons of an event for the concerned company. Estimate revisions serve as an important pointer regarding the price of a stock.
To take care of the earnings performance, we designed a screen based on improving analyst recommendations and upward estimate revisions over the last four weeks.
Do Not Ignore the Top Line
However, designing a strategy based solely on the bottom line is unlikely to result in a winning approach. According to many market watchers, a revenue beat is more creditable for a company than a mere earnings outperformance, especially in an environment of revenue weakness due to macroeconomic headwinds. To address top-line concerns, we included the price/sales ratio in our screen, which serves as a strong complementary valuation metric.
Screening Criteria
# (Up-Down Rating)/ Total (4 weeks) =Top #75:This gives the list of top 75 companies that have witnessed net upgrades over the last 4 weeks.
% change in Q (1) est. (4 weeks) = Top #10:This gives the top 10 stocks that have witnessed earnings estimate revisions over the past 4 weeks for the upcoming quarter.
Price-to-Sales = Bot%10:The lower the ratio, the better. Companies meeting this criterion are in the bottom 10% of our universe of over 7,700 stocks.
Price greater than 5:A stock trading below $5 will not likely be of significant interest to most investors.
Average Daily Volume greater than 100,000 shares over the last 20 trading days:Volume has to be significant to ensure that these are easily traded.
Market value ($ mil) = Top #3000:This gives us stocks that are the top 3000 in terms of market capitalization.
Here are 5 of the 10 stocks that passed the screen:
Boise, ID-based Boise Cascade Company, which makes wood products and distributes building materials in the United States as well as Canada, currently sports a Zacks Rank #1 (Strong Buy). BCC is aided by factors like favorable commodity wood products, pricing and a robust construction activity. BCC recently announced that it will build a 10,000-square feet warehouse in Ohio, which will expand its distribution network in the United States.
Boise Cascade’s bottom line outshined the Zacks Consensus Estimate in each of the last four quarters, the average being 45.5%. The stock, currently carrying a Zacks Rank #2 (Buy), has witnessed the Zacks Consensus Estimate for 2022 earnings being revised roughly 1% upward over the past 60 days. Shares of BCC have gained 33.7% in a year’s time.
Caleres:This Saint Louis-based company, currently flaunting a Zacks Rank of 1, engages in the retail and wholesale of footwear. Strong performance of its Famous Footwear and Brand Portfolio segments is driving the top line.
Caleres has an excellent track record considering its earnings per share. The bottom line outshined the Zacks Consensus Estimate in each of the last four quarters, the average being in excess of 100%. Shares of CAL have soared above 45% over the past year.
Headquartered in St. Louis, MO,Bunge operates as an agribusiness firm, delivering essential food, feed and fuel across the globe. BG is reportedly the world’s leader in oilseed processing, and a leading producer and supplier of specialty plant-based oils and fats.
The stock, currently sporting a Zacks Rank #1, has witnessed the Zacks Consensus Estimate for next-year earnings being revised 0.5% upward over the past 60 days. Shares of BG have gained 35.3% over the past year.
You can see the complete list of today’s Zacks #1 Rank stocks here.
Academy Sports and Outdoors: Based in Katy, TX, Academy Sports is a leading full-line sporting goods and outdoor recreation retailer in the United States. ASO continues to benefit from its strategic initiatives to improve its merchandise planning and allocation, operations, customer service and supply chain.
The stock, currently sporting a Zacks Rank of 1, witnessed the Zacks Consensus Estimate for next-year earnings being revised 10.8% upward over the past 60 days. Shares of CAL have surged more than 100% over the past year.
Berry Global Group manufactures and distributes non-woven specialty materials, engineered materials and consumer packaging products in the market. BERY is poised to gain from strength in its food & beverage and healthcare end markets, along with recovery in the construction space in the quarters ahead.
Berry Global’s bottom line outshined the Zacks Consensus Estimate in each of the last four quarters, the average being 16.5%. Shares of BERY have gained 33.1% over the past year. BERY currently flaunts a Zacks Rank #1.
You can get the rest of the stocks on this list by signing up now for your 2-week free trial to the Research Wizard and start using this screen in your own trading. Further, you can also create your own strategies and test them first before taking the investment plunge.
The Research Wizard is a great place to begin. It's easy to use. Everything is in plain language. And it's very intuitive. Start your Research Wizard trial today. And the next time you read an economic report, open up the Research Wizard, plug your finds in, and see what gems come out.
Click here to sign up for a free trial to the Research Wizard today.
Disclosure: Officers, directors and/or employees of Zacks Investment Research may own or have sold short securities and/or hold long and/or short positions in options that are mentioned in this material. An affiliated investment advisory firm may own or have sold short securities and/or hold long and/or short positions in options that are mentioned in this material.
Disclosure: Performance information for Zacks’ portfolios and strategies are available at: https://www.zacks.com/performance.